Talsi is a town located 150 km west of Riga with 13,000 inhabitants. The distribution system is an
old worn out 4 pipe system. One boiler has been converted to biofuel financed by EBRD. Total energy
production in town is 33,100 MWh

Type of project:a)

District heating rehabilitation project

Location (exact, e.g. city, region,

state):

Talsi Town

Talsi region

Latvia

Activity starting date:

August 18, 1997 (Letter of Intent)

Expected activity ending date:

Loan expire date :September 30, 2003

Stage of activity:b)

on-going

Lifetime of activity if different from ending date:c)

Expected technical lifetime is 15 years which means that the plant is expected to be in operation
till 2012.

Technical data:d)

24 new substations with heat exchangers for the domestic hot water production and temperature
control equipment will be installed. The existng pipelines will be exchanged to pre-insulated
pipeline with smaller dimensions. A total amount of 1,170 MWh heat is saved by the project.

c) Methodological work will be required to define lifetime of activities.

Methodological work will be required to determine for each type of activity what the minimum
data requirements are.

Heat production plants (bio fuel)

25 years

New installation of all main equipment parts (fuel handling system, firing equipment and boiler)
and modernisation of secondary equipment.

15 years

Conversion of existing boiler but new installation fuel handling system and firing equipment.
Modernisation of secondary equipment.

10 years

Limited installation of new equipment (only one part of the three main parts, normally the firing
equipment). Modernisation of other equipment.

Heat distribution systems and sub-stations

25 years

Pre-fabricated pipes including western installation supervision

15 years

Pre-fabricated pipes including local installation supervision

10 years

Modernisation of existing pipes.

Cost (to the extent possible):

The cost analysis is based on a model developed within the framework of an expert group set up by the
Nordic Council of Ministers and presented in the report TemaNord:564. The calculations include:

1. How would the CO2 emissions have developed without the investment from the investor country,
i.e. determination of a reference alternative.

2. The investment cost of the project.

3. Differences in operation costs before and after the investment.

4. Changes in other economic conditions, e-g- reduction of other environmentally damaging emissions.

5. The time before the project would have been implemented anyhow, or the economic lifetime of the project
if it is reasonable to expect that the project alternatively would not have been implemented within the
period in question.

The more detailed calculations are found in the table enclosed as the last page to this project report.

Swedish National Energy Administration's costs

NPV(Swedish net costs)/

6,34

US$/ton

defined as NPV of costs for NUTEK/SNEA

Emission Reduction comp. base-line

per tonne of CO2 saved compared to baseline scenario during the project's economic
life

recipient's costs

NPV(recipient's net costs)/

16,86

US$/ton

defined as NPV of costs for recipient's action - baseline case

Emission Reduction comp. base-line

(NOTE! negative value is profit)

per tonne of CO2 saved compared to baseline scenario during the project's economic
life

per tonne of CO2 saved compared to baseline scenario during the project's economic
lifetime

5) Mutually agreed assessment procedures:

Describe the procedures, including name of organizations involveda):

It is from the Swedish side intended that upon agreement with a central Latvia authority on
reporting of JI-projects, this authority will assign a local organisation, which will be involved
in the evaluation of the climate effects of this project. After an initial work in co-operation
with SNEA’s assigned consultant, this local organisation would take the main responsibility
the continued measuring for JI-reporting.

a) Please ensure that detailed contact information for all organizations mentioned is reported under

section A.2 above.

B. Governmental acceptance, approval or endorsement

Bearing in mind that all activities implemented jointly under this pilot phase require prior acceptance,
approval or endorsement by the Governments of the Parties participating in these activities, which shall be
shown as follows:

(a) In the case of joint reporting, the report is submitted by the designated national authority of one
participating Party with the concurrence of all other participating Parties as evidenced by attached
letters issued by the relevant national authorities;

(b) In the case of separate reporting, the reports are submitted separately by the designated national
authority of each and every participating Party. Information will only be compiled once reports have been
received from all participating Parties.

1) For the activity:

* Subsequent reports:

First report.

2) This report is a joint report:

Yes.

3) General short comment by the government(s) if applicable:

cf. Annex II, section B

C. Compatibility with and supportiveness of national economic development and socio-economic and
environment priorities and strategies

Describe (to the extent possible) how the activity is compatible with and supportive of national
economic development and socio-economic and environment priorities and strategies

Whenever possible, quantitative information should be provided. Failing that, a qualitative description
should be given. If quantitative information becomes available, it could be submitted using the update(s).
(If the amount of quantitative information is too large, the source could be indicated.)

Item

Please fill in

Describe environmental benefits in detail:

Annual emission reductions from savings by the project activity.

320 ton CO2

3.5 ton SO2

0.7 ton NOx

Do quantitative data exist for evaluation of environmental benefits?

No

Describe social/cultural benefits in detail:

More stable energy supply.

Improved working conditions, increased motivation.

Better indoor climate in buildings.

Improved supply of domestic hot water to inhabitants.

Do quantitative data exist for evaluation of social benefits?

No

Describe economic benefits in detail:

Decreased energy losses

Do quantitative data exist for evaluation of economic benefits?

No

E. Calculation of the contribution of activities implemented jointly projects that bring about real,
measurable and long-term environmental benefits related to the mitigation of climate change that would not
have occurred in the absence of such activities

1) Estimated emissions without the activity (project baseline):

No energy savings would have been made without the EAES-project. The fuel mix is 40 % mazout and 60 %
biofuels. The biofuels is 1/3 of peat and 2/3 of wood chips and sawdust. The total emission of CO2 from the
baseline scenario during the technical lifetime of the project is 4,640 ton. Emissions are calculated from
the elementary analysis of the assumed fuels

2) Estimated emissions with the activity:

The amount of energy saved is 1,170 MWh, with efficiency of 70 % the amount of fuel saved will be 1,003 MWh
bio fuel and 669 MWh mazout. The bio fuel consists of 1/3 peat and 2/3 sawdust and wooden chips. The
reduction of peat is 334 MWh and 665 MWh from wood. Emissions are calculated from the elementary analysis
of the assumed fuels.

Fill in the following tables as applicable:

Summary table: Projected emission reduction s:

GHG

Year 1

=1998

Year 2

=1999

Year 3

=2000

...

Year 15

Energy savings at plant based upon the baseline MWh/year)

550

1,170

1,170

1,170

A) Project baseline scenario

CO2

160

320

320

320

CH4

N2O

other

B) Project activity scenarioa)

CO2

0

0

0

0

CH4

N2O

other

C) Effect ( B-A )

CO2

-160

-320

-320

-320

CH4

N2O

Other

D) Cumulative effect

CO2

-160

-480

-800

CH4

-4,640

N2O

Other

a) Includes indirect GHG leakages.

Summary table: Actual emission reductions :

GHG

Year 1

= 1998

Year 2

= 1999

Year 3

=2000

...

Year 15

Factual energy production on biofuels/ saved energy (MWh/year)

A) Project baseline scenario

CO2

CH4

N2O

other

B) Project activity scenarioa)

CO2

CH4

N2O

other

C) Effect ( B-A )

CO2

CH4

N2O

Other

D) Cumulative effect

CO2

CH4

N2O

Other

Includes indirect GHG leakages.

F. Additionality to financial obligations of Parties included in Annex II to the Convention within the
framework of the financial mechanism as well as to current official development assistance flows

Please indicate all sources of project funding.

Category of funding

(For each source one line)

Amount

(US dollars)

Loan from NUTEK

333,333 USD

Grant from NUTEK for technical assistance

46,666 USD

1 USD = 7.50 SEK

G. Contribution to capacity building, transfer of environmentally sound technologies and know-how to
other Parties, particularly developing country Parties, to enable them to implement the provisions of the
Convention. In this process, the developed country Parties shall support the development and enhancement of
endogenous capacities and technologies of developing country Parties

Transfer of environmentally sound technologies and know-how

Describe briefly

Schematically, the transfer of knowledge involves the following activities over time:

i) Technology transfer through NUTEKs technical specialist during the implementation of the
project.

ii) Technology transfer through cooperation between foreign supplier and local partner

iii) Conferences, seminars, documentation and training.

iv) Stimulate "net-working" for the exchange of experience between plant owners with
similar problems, e g "bio-clubs"

Technology transfer has taken place through

i) NUTEK’s technical specialist support to the local project leader and municipality.

iii) Personal from boiler plant has been invited to and attended different seminars and workshops.